Geographical distribution of unemployment in Spain

This paper estimates the external shape of the regional distribution of unemployment rates and it studies intradistribution dynamics to analyse the extent of regional inequalities in unemployment rates in Spain over the last decades. It also assesses the contribution of disequilibrium and equilibrium factors in giving rise to spatial differences in unemployment rates. Besides the traditional regression analysis, the effect of those factors on the whole regional distribution is estimated. Results reveal the existence of large differentials across the Spanish provinces in unemployment rates, the geographical distribution of which is characterized by strong persistence. Most of the characteristics of the distribution are induced by the equilibrium component of unemployment, although the influence of market equilibrium variables vanishes over the period under analysis, whereas the unequal distribution of amenities is the major responsible of spatial inequalities in unemployment rates at the late 1990s.